|When people are researching insurance there is a bit of confusion on how indemnity insurance works. An indemnity insurance policy is when the insurer will cover the costs of losses suffered by the insured party up to the limit set forth in the policy. Most every insurance policy operates under this procedure there are a couple of exceptions as it relates to life insurance and personal accidents. As with any insurance policy, insurance is the assessing and managing of risk against a potential loss. There are several different types of indemnity insurance.|
An interesting type of indemnity insurance is for prizes, events or some type of promotion. When you attend a golf outing and there is a hole-in-one contest, hole-in-one insurance is actually a type of indemnity insurance. The way this type of indemnity insurance works is that the insurance company will review with the organizer of the outing and determine which hole(s) will be rewarded the prize if the hole-in-one is achieved. There are several interesting factors that are used to determine the rate and viability to have a hole-in-one contest. Deciding the rate and hole are contingent on the number of players, their skill level, length and difficulty of the whole. Another type of indemnity insurance is professional indemnity insurance.
Professional indemnity insuranceOur society has become increasingly litigious, so it is important to shield yourself from these risks with the right insurance. A frequently overlooked insurance is professional indemnity insurance. The purpose of professional indemnity insurance is to protect the policyholder in the event there is a negligent act, breach of duty, or some sort of errors and omissions that have occurred as a result of the actions of the policyholder.
There are certain industries and positions where professional indemnity insurance is more common than others. For instance people working in the accounting, legal, technology, medical and consulting field are more likely to have professional indemnity insurance. It is important to work with your insurance agent to map out the amount of coverage you will need. Make sure that you understand the details of the coverage such as will the legal representation be covered if there is a need to go to court. When you find out the maximum amount of coverage you need, see if there are different maximums for different types of occurrences. For instance is there a higher maximum payout for a breach of contract vs. a negligent act. In addition make sure you find out if this professional indemnity insurance covers any other types of litigation like a civil suit.